We are all familiar with the concept of a “normal,” bell-shaped curve. By definition, normal curves are frequency curves where most occurrences take place in the middle of the distribution and taper off on either side. A comparison of a normal curve and sales performance in hospital-based outreach programs is shown below:
The sales curve is anything but “normal.” I call it the “un-bell” curve. It is almost bell-shaped but upside down—the exact opposite of what we would expect. Why? In order to understand why, we need to view the detail (see chart of monthly net new business rate per sales representative below):
The performance of outreach program sales representatives is weighted towards the low and high ends of the revenue scale. Only 13 percent perform in the middle range of $6,000 per month. Ironically, this number correlates with a common sales representative quota for the national independent laboratories such as Quest Diagnostics and LabCorp and demonstrates that outreach programs have a very different sales performance compared to the national laboratories. There is wide variation in performance with very few in the middle and performance lumped at the low and high ends of the scale. This is a “Goldilocks” type of story: when they were good, they were very good; when they were bad, they were horrible.
Why such a wide range in performance? It’s because sales is an enigma in health care. Most hospitals do not understand how to select, train, and manage professional sales representatives. They have restrictive compensation systems that not competitive with the national laboratories overall and do not allow commission on new sales. They lack performance management training, experience, and tools. The end result is reflective of poor understanding and design.
I have a whole chapter dedicated to laboratory sales in my upcoming book, The Profit Machine in the Basement: 5% of Hospital Cost, Up to 50% of EBIDTA. Unless you are a very large regional laboratory and can afford to build a professional sales infrastructure on your own, the easiest solution is to outsource sales to a company with a track record of performance.
To learn more about how Chi can drive sales performance for your laboratory, check out this link or contact me at (800) 860-5454; ext. 503.
Kathleen A. Murphy, PhD
Chief Executive Officer
Chi Solutions Inc.